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Big 4
Big Four accounting firms hike lobbying spending [POLITICO]
Ernst & Young, Deloitte and KPMG — three of the “big four” accounting firms that offer tax and financial advisory services for some of the biggest public companies in the world — have increased lobbying spending during the third quarter of the Trump administration, according to newly released lobbying disclosure files POLITICO reviewed.
Deloitte Partners to Vote on Restructuring European Business [Bloomberg Tax]
Deloitte is planning to create a new Europe, Middle East and Africa business unit in a move aimed at building scale and boosting technology investment.
KPMG’s head of corporate finance: “We don’t need Lionel Messis or Cristiano Ronaldos” [eFinancialCareers]
“I’ve had the chance of jumping into an investment bank several times in my career,” says Jose Zarzalejos, who’s spent five years at KPMG and a decade at PWC. “But I’ve valued my work-life balance too much. I do my job, but I’m a dad too.”
Technology
EY reportedly leaked a massive 4TB database online – exposing company secrets online for all to see [TechRadar]
Ernst & Young (EY) kept a complete database backup on the public internet, available to anyone who knew where to look. The backup, a .BAK file, was 4 TB in size, and contained sensitive information such as schema, data, stored procedures, and “every secret stored in those tables”. This is according to a security researcher at Neo Security, who was doing “low-level tooling work” when an SQL Server BAK file caught his attention.
KPMG Staff to Be Rated on AI Usage in Yearly Performance Reviews [Bloomberg]
KPMG LLP bosses will start examining how staffers are using the firm’s artificial intelligence tools as part of their annual performance reviews, the latest sign of how the technology is rapidly reshaping the world of consulting. The firm is already tracking how staff are using AI using data from tools such as Microsoft Corp.’s Copilot, according to Niale Cleobury, KPMG’s global AI workforce lead. Now, they’ll be assessed on how well they’ve met the firm’s AI objectives in their 2026 performance reviews.
PCAOB board member says leadership change has sparked tech progress [CFO.com]
Christina Ho said her advocacy for technology began the moment she joined the board. “I actually have been an advocate for technology since the day I became a board member,” she said. “If you trace back to my first speech, I was talking about the future of auditing. I talked about technology and talent being the key audit quality factors for the 21st century.”
AICPA releases gen AI tool: Josi [Journal of Accountancy]
Josi was named after cost-accounting pioneer Josiah Wedgwood, an 18th-century English pottery manufacturer who created an early version of cost accounting during an economic slump to identify cost efficiencies.
Fraud
Financial advisor who conspired in multi-million dollar bank fraud sentenced to prison [Nebraska Examiner]
A key associate in the effort to defraud financial institutions out of $45 million is headed to prison, with a judge condemning his role as “deliberate and calculated.” Jesse Hill, a financial advisor based out of Hickman, helped Lincoln businessman Aaron Marshbanks fool nearly 20 banks into loaning Marshbanks money, purportedly for real estate ventures. Hill, 35, was sentenced to five years in federal prison Thursday. It was one of the largest bank frauds in state history and was first reported by the Examiner a month after Marshbanks was found dead in a downtown Lincoln parking garage of a drug overdose.
After Fannie Mae fired more than 100 for fraud, dozens say they are innocent [Washington Post]
President Donald Trump’s firebrand housing finance official, Bill Pulte, went on television this spring to say he had fired more than 100 Fannie Mae employees for unethical conduct and an alleged charity matching scheme, framing the moves as part of the administration’s broader crackdown on fraud. But almost seven months later, those staffers say they still have no information about why they lost their jobs. Beyond a brief, one-way video call in April, the employees say they don’t know if any investigations were conducted.
First Brands Lenders Allege ‘Widespread Fraud’ in Court Filing [Bloomberg]
A group of First Brands lenders have accused the auto parts supplier of “widespread fraud” and are seeking to end part of the auto parts supplier’s bankruptcy. Lenders to certain First Brands-related special purpose vehicles said in a Thursday court filing that besides existing allegations that the company double-pledged assets, new information has come to light indicating the business “made misrepresentations in numerous financial statements, credit agreements, and borrowing base certificates.”
BlackRock Stung by Loans to Business Accused of ‘Breathtaking’ Fraud [Wall Street Journal]
BlackRock’s private-credit investing arm and other lenders are trying to recover hundreds of millions of dollars after falling victim to what they called a “breathtaking” fraud, marking another breakdown in an opaque corner of the U.S. debt markets. The lenders have accused Bankim Brahmbhatt, the owner of little-known telecom-services companies Broadband Telecom and Bridgevoice, of fabricating accounts receivable that were supposed to be used as loan collateral. The lenders filed suit in August. They said Brahmbhatt’s companies owe them more than $500 million.
Law & Order
Sentencing delayed for Kan. CPA, creator of ‘Middle Finger Ranch,’ fraud scheme [JC Post]
Middle Finger Ranch is a fictitious business name that Quintin Flanagin connected to his personal bank account. Flanagin actually used the illegally obtained funds to pay for the construction on his new home.
Portuguese Police Target KPMG, Novo Banco in Corruption Probe [Bloomberg]
KPMG confirmed that police were conducting a search at its Lisbon offices “to collect information regarding one of its clients.” The firm said it is not a target of the investigation and is cooperating fully with authorities.
Audit
Missouri auditor adds intrigue to agency’s work through ‘World’s Greatest Audit Podcast’ [Missouri Independent]
“We put out a hundred and something audit reports a year,” Missouri State Auditor Scott Fitzpatrick said. “Most people are not going to read those. The podcast is a way to reach people who don’t want to read audit reports. You know, you can click on it, listen to it while you’re driving.”